Question

or each employee listed, use the wage-bracket method to calculate federal income tax withholding for an employee who has submitted a pre-2020 Form W-4. Refer to ublication 15-T. OTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1: Sam Coleridge (married; 4 federal withholding allowances) earned weekly gross pay of $565.00. Federal income tax withholding =$ 2: Michael Kolk (single; 2 federal withholding allowances) earned biweekly gross pay of $975. He participates in a flexible spending account, to which he contributes $100 during the period. Federal income tax withholding =$ 3: Anita McLachlan (single; 0 federal withholding allowances) earned monthly gross pay of $2,440. For each period, she makes a 401 (k) contribution of 9% of gross pay. Federal income tax withholding =$ 4: Stacey Williamson (married; 3 federal withholding allowances) earned semimonthly gross pay of $1,250. She participates in a cafeteria plan, to which she contributes $150 during the period. Federal income tax withholding =9

Answer 1

Here are the federal income tax withholding calculations for each employee using the wage-bracket method:

1. Sam Coleridge

Payroll period: Weekly

Marital status: Married

Withholding allowances: 4

Weekly gross pay: $565.00

Step 1: Determine the applicable wage bracket

Using Publication 15-T, we find that the wage bracket for a married taxpayer with 4 allowances earning $565.00 per week is $439.00 to $572.00.

Step 2: Calculate the withholding tax

Using the wage bracket method table, we find that the withholding tax for this wage bracket is $47.80.

Federal income tax withholding: $47.80

2. Michael Kolk

Payroll period: Biweekly

Marital status: Single

Withholding allowances: 2

Biweekly gross pay: $975.00

Flexible spending account contribution: $100.00

Step 1: Calculate the taxable wages

Taxable wages = Gross pay - Flexible spending account contribution

Taxable wages = $975.00 - $100.00 = $875.00

Step 2: Determine the applicable wage bracket

Using Publication 15-T, we find that the wage bracket for a single taxpayer with 2 allowances earning $875.00 per biweekly period is $740.00 to $1,063.00.

Step 3: Calculate the withholding tax

Using the wage bracket method table, we find that the withholding tax for this wage bracket is $87.30.

Federal income tax withholding: $87.30

3. Anita McLachlan

Payroll period: Monthly

Marital status: Single

Withholding allowances: 0

Monthly gross pay: $2,440.00

401(k) contribution: 9% of gross pay = $220.20

Step 1: Calculate the taxable wages

Taxable wages = Gross pay - 401(k) contribution

Taxable wages = $2,440.00 - $220.20 = $2,219.80

Step 2: Determine the applicable wage bracket

Using Publication 15-T, we find that the wage bracket for a single taxpayer with 0 allowances earning $2,219.80 per month is $1,933.00 to $2,545.00.

Step 3: Calculate the withholding tax

Using the wage bracket method table, we find that the withholding tax for this wage bracket is $201.60.

Federal income tax withholding: $201.60

4. Stacey Williamson

Payroll period: Semimonthly

Marital status: Married

Withholding allowances: 3

Semimonthly gross pay: $1,250.00

Cafeteria plan contribution: $150.00

Step 1: Calculate the taxable wages

Taxable wages = Gross pay - Cafeteria plan contribution

Taxable wages = $1,250.00 - $150.00 = $1,100.00

Step 2: Determine the applicable wage bracket

Using Publication 15-T, we find that the wage bracket for a married taxpayer with 3 allowances earning $1,100.00 per semimonthly period is $902.00 to $1,353.00.

Step 3: Calculate the withholding tax

Using the wage bracket method table, we find that the withholding tax for this wage bracket is $96.80.

Federal income tax withholding: $96.80